Key Financial Planning Opportunities

April 3, 2020


We’ve listed opportunities that require action, unlike programs such as the $1,200 stimulus check which is automatic.

Reduce Investment Taxes

  • Many Required IRA distributions are suspended for 2020. If already taken, you may be able to pay them back, if within 60 days.  Not all individuals will want to pay these back:  for some, retaining the income in 2020 is a good idea.

  • Although you do not need to make your IRA or other certain other contributions until July 15th when your federal tax return is due, by making this contribution now, you get your funds working.  Stocks and some other investments, if bought today, may “pop up” in any recovery down the line – and be even more beneficial if that growth is in a tax-advantaged position.

  • If you are thinking of a Roth contribution or conversion this year, consider doing this now. Any gains in an eventual recovery will be tax-free!

  • Consider selling investments for a tax loss, while re-purchasing a similar investment (taking care to avoid the wash sale rules).  If you do not use your whole tax loss this year, you can carry it forward to be used against future capital gains and income.

Health Insurance Through the Exchange.  Job loss qualifies an individual to obtain health insurance through the exchange, with all the potential subsidies for lower-income (2020 income is what counts, not 2019).  Cost of health insurance on the exchange should be compared to COBRA.  If your adult child loses their health coverage, strongly consider encouraging them toward coverage, or even possibly funding it. For more information, click here.

Higher unemployment compensation. With the additional $600 per month offered through the CARES act, folks might be compensated at a rate of $20/hour+/- for up to four months even though unemployed. Tips for managing through unemployment here.

Accessing retirement plans early.  If you need to access your retirement funds due to job loss, you can now withdraw up to $100,000 penalty-free even if you are younger than age 59 ½. See more here.

Forgivable Loans for Small Business & certain Not for Profits.  Many businesses, not-for-profits, and self-employed individuals are considering this program. More here. CPA’s and bankers are generally effective resources on this program.  Research and apply quickly as funds are limited and many entities are applying.

Take advantage of low mortgage rates. To help cushion the economy during this downturn, the Federal Reserve Board (FED) board has substantially reduced interest rates. Folks may want to consider a mortgage refinance if they can reduce their interest rate 1% or more. We recommend calling your bank or mortgage broker for current rates (which are changing quickly). Click here for more information on how and when refinance may make sense.

Suspend student loan payments.  Click here to learn how to stop paying federal student loans for 60 days with no penalty. Additionally, starting March 13th, federal student loan interest rates will be temporarily decreased to 0%, with no action needed on the borrowers’ part. The loan servicer will implement this automatically.

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